Effectively managing utilities is a crucial aspect of rental property management, impacting both operational costs and tenant satisfaction. Deciding whether to include utilities in rent or have tenants pay separately can significantly influence tenant attraction, retention, and the property’s profitability. A comprehensive understanding of utility management is essential for landlords and real estate investors.
Common Utilities in Rental Properties
Common Utilities in Rental Properties
Common Utilities in Rental Properties
| Utility |
Description |
| Electricity |
Powers lighting, appliances, and electronic devices. |
| Gas |
Used for heating, cooking, and water heating. |
| Water |
Essential for drinking, cleaning, and sanitation. |
| Trash and Recycling |
Services for waste and recyclable material collection. |
| Internet |
Provides connectivity for work, entertainment, and communication. |
| Television |
Access to cable or satellite TV services. |
| Sewer |
Handles wastewater removal from the property. |
| Heating/Cooling |
Climate control systems to maintain comfortable indoor temperatures. |
| Landscaping |
Maintenance of outdoor areas, including lawns and gardens. |
| Snow Removal |
Clearing of snow from driveways and walkways in colder climates. |
Typical Utility Payment Responsibilities
Clear communication and detailed lease agreements are vital to delineate these responsibilities and prevent disputes. The allocation of utility payment responsibilities varies based on property type, lease agreements, and local regulations.
Here’s a general overview:
Utility Payment Responsibilities
Utility Payment Responsibilities
| Utility |
Paid for by |
Notes |
| Water |
Tenant |
There is the highest count of utility providers for this. It can sometimes even be at the street or neighborhood level. |
| Sewer |
Tenant |
Sometimes bundled with water providers. |
| Trash |
Tenant |
Sometimes bundled with water providers. |
| Electricity |
Tenant |
Sometimes there is only one provider in the state, other times there are options, in deregulated markets. |
| Gas |
Tenant |
Only about half of the properties have natural gas for heating. |
| Internet |
Tenant or Property Manager |
Some programs are moving to an internet amenity model where PM handles billing to increase their NOI. |
| Landscaping |
Landlord or Tenant |
Varies depending on the lease. |
The only time this differs for SFR homes tends to be if:
A: The building is not submitted. Typical for condos, townhomes.
B: The vacancy period.
